High Demand Seen for Local Online Content
Posted on September 19, 1997
By 1998, more than 24 million adults will use the Web to obtain local news, sports and weather, search online yellow pages and locate community resources, making local content one of the fastest growing areas of online demand, according to a definitive new market study from FIND/SVP. The study found that 5l percent of Web users already access local information today.
The comprehensive report, "Local Information on the Net: User Demand, Industry Players, and Marketplace Outlook," includes survey data on consumer demand for local Internet content and indepth profiles of more than 100 players in this fast-growing industry.
"Services such as Microsoft's Sidewalk, America Online's Digital City, CitySearch and literally dozens of others hope to make new businesses out of that demand, especially now that many markets have reached a critical mass of users," said Peter Krasilovsky, noted industry analyst and report author. "It's still too early to pick the winners and losers. We expect to see some consolidations and additional partnerships in the very near future."
Whether such services succeed or not depends on several factors, including how often they're used. "Most services are being developed as enhanced directories and probably won't get used more than once or twice per week," according to Krasilovsky. "To really succeed, these sites need to be used nearly on a par with daily newspapers or city magazines. Anything short of this could prove fatal to their advertising-based business models."
If successful, local online advertising revenues alone could rise to more than $500 million by the year 2000, the report concludes. Much of that revenue will come from enhanced directory listings from small businesses. Other revenue may be cannibalized from classifieds and yellow pages.
In one surprise, the study found that local business news and information is used more than any other single category of local content by today's early adopter local online users. "Local business content is not as glamorous as movie and restaurant reviews, but it's what local business users want, and they're the most likely to go online every day," said Thomas E. Miller, vice president of the Emerging Technologies Research Group of FIND/SVP.
The report also found:
- - Seven metropolitan areas now have more than one million Internet users, and more than 46 communities boast over 100,000 online users
- - 15% of Internet users said they would sign on to a one-stop virtual city on a daily basis; 31% would sign on at least weekly
- - Internet users that access local information are also more likely to search for product information, click on product ads, and make purchases online
The Emerging Technologies Research Group of FIND/SVP recently published The 1997 American Internet User Survey and is currently accepting charter sponsors for the upcoming 1997 U.S. Small Business Internet User Survey.